I am an original board member of the Hawaii Tourism Authority (HTA) when it was founded in 1998. I think it’s important to clarify the origins of HTA and why it’s important to keep HTA intact.
Back then, on the recommendation of the Economic Revitalization Task Force, the HTA was founded by Governor Ben Cayetano to help the tourism industry overcome Hawaii’s sluggish economy, which stagnated for seven years after the Japanese bubble burst.
To compete effectively, it was recognized that Hawaii would need to use more aggressive marketing efforts to maintain its position in the world market. It created a new and special mechanism for funding tourism through the Temporary Accommodation Tax (TAT), increased the amount of tourism funding to globally competitive levels, and established a cabinet-level agency for tax oversight and tourism development and marketing.
The dedicated source of funding limits legislative interference and provides a consistent source of funding for the agency’s marketing and tourism management activities. The original law that created HTA dedicated 37.9% of TAT’s revenue to the Tourism Special Fund (TSF), which was approximately $ 60 million. Over the past 20 years, the amount of the TSF has decreased significantly. In fiscal 2019, the state raised $ 600.3 million in TAT revenue, but the TSF received only 13% ($ 79 million) of TAT revenue. The TAT payout is now being diluted, with 57% of the TAT going to the general fund and the remainder going to other areas.
The marketing and positioning of the destination by HTA not only drives demand. It is also his investment in Hawaiian cultural programs, natural resources, festivals and events, other community-based tourism projects and tourism data that protect our destination and its brand. It then followed that our private companies were spending more than nine to ten times the HTA marketing budget to focus on a call to action for their companies.
State lawmakers are currently reviewing two bills that, if passed in their current form, would cripple HTA’s ability to sustainably manage tourism and jeopardize the branding of our visitor industry at a time when Hawaiian tourism is likely Will take years to recover. House Bill 862 was redesigned to remove HTA’s critical cultural, environmental, and community programs that are essential to sharing Hawaii with the rest of the world, as well as HTA’s ability to manage the destination.
HB 200 eliminates the dedicated source of funding for HTA through the temporary housing tax levied on funds spent by people residing in legal Hawaiian accommodations. In its place would be a temporary and much smaller source of funding through the American Recovery Planning Act in 2022 and the state general fund thereafter.
HTA has more than proven itself in the two decades since it was founded. This is not the time to change HTA’s funding mechanism or change HTA’s ability to guide marketing and positioning of the destination, and to address community concerns about managed tourism. In order for tourism to remain a major economic development strategy for the state of Hawaii, we cannot be complacent with our approach to tourism. We need to focus on the livelihood of our community and get our residents back to work.
Keith M. Vieira is a Principal at KV & Associates, Hospitality Consulting.
